South African Dividend Insights

South African dividends recorded an 8.4% year-on-year decline in Q3, partially reversing the 26.0% rebound in Q2. Despite this, the market remains relatively stable, with companies showing caution due to geopolitical uncertainty. In the long-term historical context, payouts remain strong, reflecting strong corporate earnings and solid cash generation.

Highlights

• Q3 decline: ZA recorded an 8.4% year-on-year decline in dividend distributions, reversing the 26.0% rebound from Q2. Local companies declined at a greater rate of 12.6%, reflecting strength from companies with a wider geographical remit.
• Special dividends: Special dividends increased 55.9% year-on-year. However, on a year-to-date basis, they were only up 6.1% when compared to the same period in the prior year. This absence in special dividends contributed to the overall decline.
• Yields: Dividend yields remained stable across all major SA indices in Q3, reflecting strong earnings and solid cash generation. The FTSE/JSE SWIX Top 40 recorded a modest dividend yield decline from 3.2% to 2.7%, driven by further equity price appreciation.
• Companies: Five companies accounted for 52% of total payouts in Q3. While this was a repeat from Q2, their composition has changed. Richemont, Standard Bank, AngloGold, Absa Bank and Gold Fields showcased how gold is still a safe-haven asset.
• Industries: Metals & Mining, Tobacco and Banking have continued to dominate dividend distributions; however, their influence is starting to weaken, with Metals & Mining and Tobacco fluctuating in payouts. Paper & Forest Products and Financial Services also saw a strong decline in payouts.